Electric Capital recently raised $1 billion to fund cryptocurrency networks, Web3 protocols, and blockchain-powered businesses.
Electric Capital wrote in a blog post that they are long-term investors and partners to their founders. They claim to have spent the past four years “building software and data systems that enable [them] to participate in Web3 ecosystems.”
Electric Capital further noted that they “use the infrastructure [they] have built to provide liquidity, drive key governance proposals, help teams better understand their ecosystems with [their] data, and more.”
Since 2018, they have been investing in “programmable money”. They believe that crypto enables “a parallel, programmable financial system.”
Now, a new economy is developing on top of the programmable money stack — DeFi “enables permissionless access and innovation, NFTs are digital-native assets, DAOs create a way for communities to allocate resources, Decentralized Infrastructure provides alternatives to centralized tooling, and more.”
According to Electric Capital, these are the trends that are emerging:
- DAOs will empower global communities to allocate resources to initiatives large and small.
- NFTs will form the asset layer for Web3 and the bedrock for new types of financial instruments.
- Decentralized Finance will democratize access to financial products around the world.
- Decentralized Infrastructure will allow engineers to build the next generation of applications without a central point of failure or control.
- Accessible user experiences will onboard millions of users to Web3.
According to the firm DeFi has evolved from a set of experimental financial services built using smart contracts “to mature protocols handling billions of dollars.”
The firm added that they “see the ecosystem evolving onto multiple blockchain platforms and democratizing access to sophisticated financial instruments.”
They also noted that Ethereum presents “a unique set of tradeoffs between security, speed, and decentralization.” They pointed out that “non-Ethereum chains may be a more affordable onramp for the next wave of users into DeFi.”
The firm also noted that they “see significant opportunities in building DeFi services for these new users.”
As more users onboard onto alternative chains, they will “want to access potential yield opportunities on other chains.” Similarly, Ethereum users will “want to access yield opportunities by providing capital onto new chains.”
As noted in a blog post, platforms like Ribbon “simplify complex options strategies.” The company added that it wants “to fund platforms that give users simple exposure to strategies like delta-neutral yield farming, leveraged market making, downside protected lending, and others.”
As more protocols launch and grow, the “need for bootstrapping mechanisms will increase.” The firm also believes “there will be new, innovative bootstrapping mechanisms as new protocols launch.”
They added that the standardization of payment streams in crypto “would unlock many use cases: employment contracts, vesting contracts, DAO-to-DAO contracts, and even unsecured lending.”
For more details on this extensive update, check here.